Wednesday, June 13, 2012



This morning’s (Wednesday, 6/13/12’s, page A2, “Steep Rise in Health Care Costs Projected”) Wall Street Journal treated its readers to news that the growth of health care spending, which has slowed over the last three years, will pick up again if the Obama health care plan is implemented in 2014. These assertions were made, according to the Journal, in a report issued by something called the Centers for Medicare and Medicaid Services (“CMMS”).

The report attributes the slowdown in the health care spending over the last few years to the recession but states that the pickup it sees in such spending in the post 2014 years is due not so much to the Obama health care plan (The report attributes only 0.1% of the projected growth rate to implementation of the plan.) but, rather to the aging of the population and the resultant growing demands on Medicare.

The CMMS is absolutely right in the former assertion. The recession resulted in the loss of health insurance by many people and a drastic reduction of incomes by at least as many people. This forced people to make hard decisions about what medical treatment is worth expending of their own money. When someone else is paying for something, be it a meal out, a vacation, or health care, it assumes vast importance; we simply cannot live without it, especially in the case of the last. But if we have to pay for it with our own money, we tend to be a little more circumspect in our expenditures. The asinine ads we see for miracle drugs that are supposed to make us happier, more masterful in the bedroom, calmer, more pain free, or free from the bitter necessity of having to sneeze once in awhile suddenly become less compelling. Thus, it is natural that, when going to the doctor or getting a prescription became our responsibility, we did less of both. This, contrary to popular opinion, is a very good thing. (See my seminal 8/24/11 post, AS LONG AS YOU’RE PAYING, I’LL HAVE THE LOBSTER!).

The CMMS is at least partially wrong in its latter assertion; i.e., that the growth in health care spending is attributable more to the aging of the population than to the Obama health care plan. Yes, older people use more “health care” than younger people, but age has little or no impact on our being subject to the rules of economics. Older people not only consume more health care than younger people, they also consume more health care than their grandparents did. Why? Because, with the advent of Medicare, someone else was paying for their health care. Not every prescription that your parents or grandparents (or, for many of my readers, you) take is vital. Without even the most rudimentary knowledge of medicine (I haven’t been to a doctor for at least the last ten years and have no intention of going in the next ten years, either. Good nutrition (five vegetables or fruits a day supplemented by frequent visits to White Castle), brobdingnagian water consumption, and simple over the counter amelioratives (primarily vaseline and rubbing alcohol, with the very occasional aspirin or ready substitute) serve to either avert or treat any malady I have or might encounter.), I know this is true. Why? Because if Medicare and its adjutants, and especially George Bush’s idiotic prescription drug rider, were not so generous, older people would do without the drugs they now find so absolutely vital and would get along just fine. People need most of these drugs only until they have to pay for them. This iron rule of economic applies to the young as well as the old. Yes, with age comes the need for more medication and more trips to the doctor, but not as much medication and as many trips to the doctor as current wisdom, amply abetted by someone else writing the checks, would have lead us to believe.

Given the propensity of people, regardless of age, to suddenly “need” things when those things are either free or heavily subsidized, it is indeed the Obama health care plan, and not the aging of the population, that will drive the CMMS’s projected increases in health care spending.

The really dyspeptic aspect of the Obama health care plan is not the insurance mandate, with which I have absolutely no problem. See my 3/29/12 post, PAY ME NOW OR PAY ME LATER… No, the really bad aspect of the Obama plan is that it exacerbates the main driver of higher health care costs in this country: the divorce of the person receiving the care from the person paying for that care. If health care costs are ever to be brought under control in this country, the American people have to bring their considerable shopping skills to the health care marketplace; i.e., users of health care services have to have more skin in the game. The current system has created the problem by taking skin out of the game, i.e., by having people spend other people’s money on their health care. The Obama health care plan makes this very discordant system even worse.

No comments: